Carpooling Set to Hit the Growth Highway

The carpooling segment of the taxi industry began around 2013 and there are no comprehensive stats available on how big the carpooling industry is. However, it is just a fraction of the organised taxi industry. Some companies exclusively into carpooling are Orahi and BlaBlaCar while aggregators like Uber, Meru and Ola are also in the business.

Remember when Delhi Chief Minister Arvind Kejriwal and two of his fellow ministers shared a car to office to walk the odd-even talk? Several Parliament members adjusted in similar fashion to counter the scheme. But across India, a different kind of carpooling is taking roots as a business. The number of users, who download a carpooling app to share a cab with friends or strangers and save money, is growing.

Companies such as Orahi and BlaBlaCar are pioneering India’s carpooling push. Aggregators Ola, Uber and Meru are also in the game. Industry experts say that there is a major opportunity for any player in the taxi industry who’s willing and able to invest time and money and develop the market into an organized one. The currently fragmented Indian taxi industry is worth nine billion US dollars. Only about seven per cent of the market is organized, of which carpooling is miniscule. For instance, Uber and Ola together easily book over two million rides of non-carpooling rides daily. Compare this to carpooling apps that book about 30,000 daily across India. Interestingly 5,000 of these shared rides are booked in Delhi.

Orahi claims to be the first to offer a carpooling app in India. The company was founded in 2010 and their website was launched for operation in March, 2013. Orahi reported a Rs 3.5 crore investment from the Indian Angel Network in January, 2016. The lead investor of this round Vinish Kathuria wrote in an article, “There are 25-30 million cars on Indian roads daily. Even if 10-15% of them use carpooling, it will have a tangible impact on road traffic, pollution and quality of our lives. Triggered as a popular choice amongst commuters due to environmental concerns, carpooling has emerged as a scalable business model for investors.” Those in the carpooling business claim environmental benefits due to reduction in high carbon emissions especially in metros like Delhi. Orahi claims to have helped reduce 350 tonnes of harmful emissions.

BlaBlaCar, the world’s largest ridesharing community, came to India in 2015. Raghav Gupta, India Country Manager for BlaBlaCar thinks carpooling/ridesharing makes sense in India due to ease of booking rides through carpooling apps. Unlike trains, they can be booked even at the last minute. Plus “it’s a big-road country where people travel a lot”, he said.

“Carpooling is most economical for a passenger. It works out to Rs 3.5/km, cheaper than metro considering the last mile connectivity. Also cost of petrol is shared for a car-owner, two passengers with him means zero petrol cost,” says Arun Bhati, COO, Orahi.

While other metro areas are also on the radar, Ola, BlaBlaCar and Orahi all say Delhi is a very attractive market for carpooling. A popular carpooling route for those living in NCR is West Delhi to Gurgaon. “There are 54 lakh people working in NCR. That’s who we want to get,” says Arun.

We spoke to a cross section of carpoolers. Their experience has been mixed so far. Some of them admitted that it helped them save money and gives them the added pleasure of travelling with friends. But others found it time consuming. A woman executive didn’t enjoy the feeling of travelling with three men she didn’t know.

Which means that the business must iron out a few rough spots. Confusing payment methods is one such area. But the biggest concern is safety, especially for female travellers. At present, carpoolers’ male-female ratio is 80:20. To get more females onboard, these apps are now offering features like female-only groups and strict ID verification methods. Nonetheless, in these congested and environmentally unfriendly times, the carpooling business is bound to hit the growth highway.